Operating ratio of railways at 16-yr low: CAG

The operating ratio of railways during financial year 2016-17 was 96.5 per cent, the lowest since

2000-01, when it was

98.34 per cent, according to the Comptroller and

Auditor General (CAG).

Operating ratio represents an organisation or company's operating expenses as a percentage of revenue.

The CAG report, tabled in Parliament on

Tuesday, said there was no justification for not fully recovering the cost of passenger services in the case of AC 1st

Class, First Class, and AC

2-Tier.

It added the operating ratio of 96.5 per cent did not reflect the true financial performance. The ratio would have further deteriorated to 99.54 per cent if the actual ~400.25 billion towards pension payment been incorporated in its accounts, instead of the ~350 billion shown. If the additional expenditure on pension payments of zonal railways had been appropriated, total gross working expenditure would have increased by ~50.25 billion to ~1.64 trillion, leading to a higher OR, the country's apex auditor said.

The ratio was 90.49 per cent in 2015-16.

“Since operating Ratio is a direct indicator of the working of railways, the ministry of railways should also look into innovative ways for revenue generation and closely monitor the expenditure,” the report said.